In 2025, the Virginia General Assembly passed House Bill 1725 (HB1725), known as the Medical Debt Protection Act (“the Act”), which was signed into law by Governor Glenn Younkin and codified as Chapter 59 of Title 59.1 in the Code of Virginia. This legislation aims to shield patients from aggressive and burdensome medical debt collection practices, particularly from large health care facilities and medical debt buyers. The Act takes effect on July 1, 2026.
Key Provisions of the Act
The law introduces several important protections for patients with medical debt (debt arising from health care services):
Limits on Interest and Late Fees – Large health care facilities or medical debt buyers cannot charge any interest or late fees on medical debt until 90 days after the due date on the final invoice. After that period, any interest or late fees are capped at 3% per year of the debt amount.
Restrictions on “Extraordinary Collection Actions” – Creditors and debt collectors are prohibited from using aggressive tactics to collect medical debts until at least 120 days after the final invoice due date and include actions such as:
Before pursuing any such action, creditors must provide patients with a notice at least 30 days in advance. The notice must include information about available financial assistance (if from a large facility), a plain-language summary of the facility’s financial assistance policy, and details on the intended collection actions.
Rules for Selling a Medical Debt – Medical creditors can sell debt only to a medical debt buyer, and only if they have a legally binding written agreement that includes protections like:
Additionally, the original creditor remains liable for actions taken by the buyer (subject to any agreed indemnification).
Additional Safeguards – Large facilities must disclose extraordinary collection actions in their billing policies.
After financial assistance is applied, if it is found that a patient overpaid, any excess must be refunded within 60 days.
Enforcement – Violations of the Act are treated as prohibited practices under the Virginia Consumer Protection Act, allowing for civil penalties and remedies.
Background and Context
The Act builds on earlier Virginia efforts to address medical debt challenges. For example, in 2024, Virginia enacted measures prohibiting certain health care providers and collectors from reporting medical debt to credit reporting agencies (known as HB1370, effective July 1, 2024). The 2026 Act focuses more on billing, interest, and collection practices.
Medical debt has been a widespread issue in Virginia, with many residents facing financial strain – and even ruination – from unexpected health care costs. Major advocates of the Act included American Cancer Society Cancer Action Network (ACS CAN) and Virginia Poverty Law Center (VPLC).
ACS CAN’s focus on the unique and severe burden of medical debt on cancer patients and their survivors helped provide data showing the impact of illness-related medical debt. ACS CAN also unified other patient help organizations to present a unified voice to emphasize to lawmakers that the legislation would reduce the fear associated with medical debt and treatment. Meanwhile, VPLC highlighted the broader impact of fairness and stability to families facing financial ruin and provided expertise in consumer rights and debt collection practices to help build the framework for the legislation.
Advocates of the Act have praised the bill for protecting patients’ major assets (such as their home), limiting interest gouging, and ensuring that patients are well informed about financial aid options. They say the Act represents a significant step toward more compassionate and regulated handling of medical bills in Virginia.
Opponents of this type of legislation don’t point specifically to Virginia’s Act, but argue generally (and in other states) that this type of legislation overreaches federal debt collection authority and that it has the potential to reduce revenue for hospitals and debt buyers, which, in turn, could raise medical costs.
The full text of the Act can be found at Code of Virginia, Title 59.1, Chapter 59 (§§ 59.1-611 through 59.1-613).
If you have questions about this article, please contact Denise Reverski (dreverski@setlifflaw.com) at (804) 377-1272 or Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261.
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